Why require people to buy health insurance?

The 'individual mandate' expected in any final healthcare bill is meant to spread the cost and risk and to make sure that people don't wait until they're ill to buy coverage.

By Kim Geiger and James Oliphant
LA Times
December 21, 2009

Reporting from Washington

Any final healthcare bill is likely to require that virtually all Americans obtain insurance. This "individual mandate" has stirred some controversy and confusion. Here are some questions and answers.

Why require everyone to buy insurance?

All insurance is based on the idea that most of the time, most people are not filing claims. As it applies to healthcare, supporters say, most people are pretty healthy most of the time, but eventually almost everyone incurs major medical expenses. If only sick people bought insurance, the system would collapse because plans would be forced to pay out more than they took in. And since nearly everyone who develops a serious medical problem gets treated (with or without insurance), the cost of treating the uninsured is passed on to other people. In effect, those with insurance are helping pay the costs of those without it.

What benefit do I get from being required to buy insurance?

Making the underlying insurance mechanism stronger by getting more people into the system assures that you will get coverage when you face big medical bills. With everyone paying into the system, companies will get premiums from millions of new clients. That income will make it possible for the companies to stop denying coverage to people who have a preexisting condition or are likely to get sick in the near future -- smokers or middle-age people at risk of heart disease, for example.

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